EDITOR’S NOTE: Make no mistake: America is at risk from an epidemic of white-collar crime. American money is at risk, American prestige is at risk, and national security is at risk — as Americans hatch one fraud scheme after another and recruit other Americans (and citizens of other countries) to help the schemes mushroom. Some of the conduct reads like fiction of the strangest sort. It’s enough to want to make you gag.

The story below may make some readers angry — and rightly so. It covers allegations against Larry Michael Parrish of Walkersville, Md. Parrish is accused by the SEC of orchestrating a $9.2 million swindle through IV Capital, his mysterious firm incorporated in Nevis, an island in the Caribbean. The scheme allegedly had the characteristics of a sort of HYIP/prime bank hybrid. “Programs” that resemble the one allegedly pushed by Parrish are regularly hawked on Ponzi scheme and criminals’ forums such as Talk Gold and MoneyMakerGroup. Because law enforcement has made inroads in educating the public about the dangers of HYIP schemes, the promoters of such schemes now are trying to make prospects believe they are not investing in an HYIP — and millions of dollars continue to vanish into giant, money-sucking sinkholes.

The alleged Parrish scheme also has a link to another scheme — this one a “diamond-themed” caper, the SEC said.

The man was suffering from cancer. Parrish assured him that investing with him was safe, that the man’s wife would not have to worry about her finances after his death, that “the investment would provide for his wife for the rest of her life.”

“That money is now gone,” the SEC said. And so is the money from 70 other investors in three states, about $9.2 million in all, the agency added.

Because Parrish had had well-documented run-ins with the SEC, a trove of information about him was available online and in public filings. Some of his investors even found it. When they approached him with questions, Parrish lied, the SEC said.

“When expressly asked by investors, Parrish denied that he was the named defendant,” the SEC charged.

Although Parrish claimed he’d been running a successful business, he’d been running a Ponzi scheme since 2005, the agency said.

The scheme began to collapse in June 2009, and the excuse-making began, the SEC said.

“On August 17, 2009, Parrish wrote to his investors to explain the ‘delay in the payment of past earnings,'” the SEC charged. “The letter claimed that some investors in IV Capital had not paid taxes on earnings which ‘triggered a bank audit for the entire group.'”

“Interest” payments could not be made until the purported bank audit had been completed and until the investors who purportedly weren’t complying with tax laws came into compliance, Parrish allegedly told investors.

“As part of its investigation, the SEC did not find — and Parrish and IV Capital did not provide — any evidence that there ever was a bank audit that resulted in Parrish being unable to make payments to the investors,” the SEC said.

But Parrish held to his cover story for months, the SEC said.

In October 2009, he told investors that “there were still four members who were out of tax compliance,” the SEC said.

By December 2009, the SEC said, Parrish was reporting good news to investors: Only three members purportedly remained out of tax compliance.

Even so, the SEC said, Parrish told investors he faced other challenges. These challenges purportedly included “administrative work and time traveling and meeting with non-U.S. clients.”

A Phantom Partner?

In February 2010, two investors scheduled a meeting with Parrish in New York to talk about “missed payments and [the] current status of IV Capital. Parrish and a “purported partner in IV Capital” were supposed to attend the meeting.

“The night before the two investors were to fly from Colorado, where they reside, to New York, Parrish contacted them to say the purported partner was unavailable to meet. As part of its investigation, the SEC did not find — and and IV Capital did not provide — any evidence that Parrish had any partner in IV Capital.”

What the SEC eventually discovered was that Richard Dalton, who was running a separate, “diamond-themed” Ponzi scheme, was acting as an agent for Parrish in the Parrish Ponzi scheme, which was called the “Trading Program.”

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YES DON IT WAS e-gold is a digital gold currency operated by Gold & Silver Reserve Inc. under e-gold Ltd., and allowed the instant transfer of gold ownership between users until 2009 when transfers were suspended due to legal issues. e-gold Ltd. is incorporated in Nevis, Saint Kitts and Nevis but the operations were conducted from Florida.
In 2007 the proprietors of the e-gold service were indicted by the United States Department of Justice on four counts of violating money laundering regulations. In July 2008 the company and its three directors pleaded guilty to charges of “conspiracy to engage in money laundering” and the “operation of an unlicensed money transmitting business” in the U.S. District Court for D.C.[1] The company faces fines of $3.7 million.
As of November 2009 the company’s website states “As e-gold Users are aware, by agreement with relevant authorities including the U.S. Department of Justice, e-gold has suspended all e-metal Spend activity subject to meeting certain licensing requirements. As a result, e-gold Users have been unable to engage in any transactions, including exchanges, that would require either receiving or making an e-metal Spend from the accounts they control. We are, however, working diligently to develop a means by which account Owners will be able to access the value in their account”.[2]
As of December 2010 the company states that refund policy has been approved “We are pleased to announce that we have finalized an agreement with government authorities that will permit owners of VAP-Qualified Accounts to be paid in U.S. dollars their proportionate share of the monetized value of the e-metals in such Accounts”